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By Steven Milloy
January 15, 2009
Incoming White House energy-environment czar Carol Browner was recently discovered to be a commissioner in Socialist International. While that revelation has been ignored by the mainstream media and blithely dismissed by her supporters, you may soon be paying the cost of Browner’s political beliefs in your electricity bill.
Socialist International is precisely what it sounds like -- a decidedly anti-capitalistic political cause. Founded in 1951, its organizing document rails against capitalism, asserting that it “has been incapable of satisfying the elementary needs of the world’s population … unable to function without devastating crises and mass unemployment … produced social insecurity and glaring contrasts between rich and poor … [and] resorted to imperialist expansion and colonial exploitation.…” Socialist International also asserts, “In some countries, powerful capitalist groups helped the barbarism of the past to raise its head again in the form of Fascism and Nazism.” So Socialist International at least partly blames Adolph Hitler on capitalism.
According to its own principles, Socialist International favors the nationalization of industry, is skeptical of the benefits of economic growth and wants to establish a more “equitable international economic order.” In true Marxist form, it asserts that, “The concentration of economic power in few private hands must be replaced by a different order in which each person is entitled -- as citizen, consumer or wage-earner -- to influence the direction and distribution of production, the shaping of the means of production, and the conditions of working life.”
There’s much more in Socialist International's principles, but you get the idea.
So what does all this have to do with your electricity bill? In late-December, Carbon Control News reported that Browner was a “strong backer” of utility “decoupling,” which had emerged as a “key climate policy priority for Obama.”
What is utility decoupling? The profits of electric utility companies have traditionally depended on the amount of electricity sold; basically, the more power that is sold, the more profit that is earned. The productivity-profitability link is a logical and standard business principle that is easy to understand, easy to implement and that has worked for, well, millennia in myriad business ventures -- but no more for electric utilities, if Browner has her way.
Browner wants to sever, or decouple, a utility’s profits from the amount of electricity it sells. More electricity means more coal and natural gas burning, which, according to green dogma, means more greenhouse gas emissions and global warming. So Browner believes that less electricity production is, at least, a partial answer to climate change. But less electricity would mean less profitability for electric utilities, a powerful Washington lobby that Browner can ill afford to antagonize.
To date, the electric utility industry has aided and abetted the climate alarmist cause, if not by actually lobbying for global warming regulation, then at least by its willingness to entertain such regulation as public policy worthy of serious consideration. But since endangering utility profits would likely galvanize the industry once and for all against emissions regulation, the green dilemma boils down to figuring out a way to reduce electricity sales while guaranteeing utility profits. Enter decoupling.
How would decoupling actually function in practice? There are several different schemes for decoupling, but their tedious complexity precludes elaboration here. But the schemes all essentially amount to the same thing -- sticking it to ratepayers and taxpayers. This should come as no surprise, when you stop to think about it.
Decoupling involves government guaranteeing electric utilities steady or steadily increasing profits for selling less electricity. That means implementing one of three basic scenarios: (1) consumers paying more for less electricity; (2) electricity prices remaining steady and taxpayers being called upon to subsidize the difference between the profits from actual electricity sales and the profits guaranteed by government; or (3) some combination of the two. There are no other possibilities.
Decoupling advocates assert that the consumers can avoid higher electric bills through “voluntary conservation measures” -- that is, you can lower your bill by using less power. It’s a specious assertion since consumers will still pay higher rates for the electricity they use. Moreover, “voluntary conservation” is not necessarily without cost. Compact fluorescent lightbulbs, insulation, weather stripping, solar panels and other electricity conservation efforts all can entail significant added costs that can take many years to pay for themselves.
Getting back to Browner, what could be more anti-capitalistic than to disassociate profits from sales? It’s often difficult enough to determine profits when they are tied to sales -- ask any author or recording artist. Imagine the difficulty, arbitrariness and potential for gamesmanship, if not just plain fraud, involved with government-dictated profitability based on reducing productivity. In the case of electric utilities, already a most heavily regulated enterprise, even greater government regulation of the industry will be required, which, of course, is what a good socialist like Browner would want.
Perhaps what’s most troublesome about all this is the stealthiness. Less than a week after Browner was outed as a Socialist International muckety-muck, the group scrubbed its web site of her photo and evidence of her commission membership. And in the larger picture, it's intellectually dishonest for advocates of socializing electric utilities to promote the euphemistic “decoupling” as if it were some novel solution rather than what it really is -- a subversion of our capitalistic system.
You know, one might get the impression that there’s actually something wrong with, and embarrassing about, a key White House adviser advocating the undermining of a basic principle of our economic system.
Steven Milloy publishes JunkScience.com and manages the Free Enterprise Action Fund. He is a junk science expert, and an adjunct scholar at the Competitive Enterprise Institute.
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